This remarkably low level of growth is not a typing mistake. It is the figure by which a discrete and limited element of a claim will be increased from 1 April 2021, that being the charges recovered by the state following NHS treatment provided to someone negligently injured by another person.
The 0.2% figure is the latest estimate for Hospital and Community Health Services (HCHS) pay and price inflation. HCHS is the index conventionally used to increase the relevant recoverable charges and the changes take effect annually on 1 April. Over the last decade and a half, the HCHS uplift applied has generally been between 2% and 4%. Therefore the current 0.2% increase is very much an outlier and the reasons for it being so low are not immediately clear.
At the time of writing, only the new regulation for Scotland has been released. It confirms that the very modest increases in the relevant charges for the 2021/22 year will be as follows:
- cost of each ambulance transfer increased by £1 to £225
- cost of out-patient treatment increased by £1 to £744
- cost per day of in-patient treatment increased by £2 to £915
- cap on recoverable charges per case increased by £116 to £54,682
Given that the level of each of the above has, since the scheme was expanded in 2007 (to include non-motor cases), also been the same in England & Wales and in Northern Ireland, in the next few weeks we should expect to see amended regulations applying the new figures in both those jurisdictions.
It seems to me that the increases here are so low as to be unlikely to have any material effect on pricing. On this, the policy note accompanying the Scottish regulations states that: “spread evenly among all holders of compulsory motor insurance, then the average cost per policy could rise by 0.003% or around 1.5p per policy.“